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New Elk Coal Company:Coal Mining In an Established Gas Field

RAYMOND C. PILCHER, P.G.

PRESIDENT, RAVEN RIDGE RESOURCES, INCORPORATED

CHAIR, UNECE GROUP OF EXPERTS ON COAL MINE METHANEVICE-CHAIR, UNECE COMMITTEE ON SUSTAINABLE ENERGY

DNIPRO, UKRAINE12 JUNE 2019WORKSHOP ON BEST PRACTICES IN COAL MINE METHANE CAPTURE AND UTILIZATION

Outline

• Background

• Obstacles to employing a comprehensive development plan

• Can co-development of resources lead to sustainable

energy development?

• Mutually undesirable impacts on coal and gas production

• Conclusions

Background


Raton Basin geology

• Two gassy coal packages – Late Cretaceous and Paleocene• Raton Formation• Vermejo Formation

New Elk Mine

• Formerly the Allen Mine opened in 1951 to supply metallurgical coking coal to an iron and steel production facility in Pueblo, CO

• Produced from the Raton Formation

• The Allen Mine closed in the early 1980s and was allowed to partially flood

• Nearby Golden Eagle Mine (formerly the Maxwell Mine) is gassy– Metallurgical/steam coal produced from Maxwell seam

– Longwall mine which closed December 1995 when its production was 1.5 million tons

– Methane recovery project in 1997 from abandoned mine vent shafts, existing methane drainage boreholes and gob vent boreholes

• 1.5 mmcf/d recovered in 1997

New Elk Mine assets

New Elk Coal Company• Assets: property ownership, coal leases

and water rights

– Property rights include temporarily idled New Elk underground coal mine (formerly Allen Mine)

– Other surface assets: coal prep plant, coal storage silos, mine facility buildings, surface conveyors, electrical substations, mine waste disposal areas, coal storage areas, ventilation air shafts, belt conveyor and track slopes and approximately 13 miles of railroad right-of-way

• Was fully permitted in 2012 but ceased business in 2015

Photo credit: Cline Mining Corporation

New Elk Mine location and historical setting

Raton Basin CBM

Raton and Vermejo Formations

• Basin is rich in CBM and conventional natural

gas

• Commercial CBM production began 1982

• Third largest CBM producing basin in the US

• Raton coal - 193 cubic feet/ton

• Vermejo coal - 492 cubic feet/ton

• Estimated methane resources are 38.7 trillion

cubic feet

• Both formations produce economically

important quantities of coal, gas and water

• By 2008 more than 3,800 wells produced 800

billion cubic feet

Raton Basin CBM and water production

peak and decline

Co-development of resources

• Since closing of Allen Mine at least 737 CBM wells have been drilled in the mining area– 254 of those wells had been drilled in

the New Elk Mine’s leasehold

• New Elk Coal Company’s plans for reopening the mine must consider the possible effects from the existing CBM wells penetrating the mineable coal seams

Obstacles to employing a comprehensive development plan


Obstacles to co-development

• Ownership Issues– Minerals and gas primacy

– Surface access– sometimes difficult or impossible due to urbanization or environmental restrictions on sensitive wildlife habitat

• Technical Issues– Influence of CBM wells on mine design

• Size of barrier pillars necessary to protect integrity of CBM wells

– Timing and coordination of development

Ownership considerations for comprehensive development

• Lack of policy – no mandated

coordination efforts

• Primacy issues between coal

mining and CBM/gas

production

• Primacy determined by

language in mineral leasing

contracts

Safety considerations for comprehensive development

• Validation of cement bond

integrity of CBM wells that

penetrate the coal mine

footprint

• Mine could face unplanned

abandonment costs for CBM

wells completed within the

mineable coal seams

Cross-Section through coal mine

A closer view of casing integrity and bonding to the

borehole

Can co-development of resources lead to sustainable energy development?


Sustainable energy development

Requires balancing potentially competing factors:

Environmental Protection

Energy Security

Energy for

Quality of Life

Sustainable Energy

Sustainable energy

• What are some considerations? – Environmental Protection

• What happens to produced water? Can it be conserved?

• Are fugitive emissions of methane controlled and used.

– Energy for Quality of Life• All sustainable development goals depend on energy, modern life depends on clean

and abundant energy

• Energy demand is growing and regional needs are substantial

• Provides sustained job availability

• Safe working environment

– Energy Security• Provides alternative sources of energy as a bulwark against geopolitical events

• Coal and natural gas (methane) are primary energy fuels that can be used together or separately to generate electricity, can be transported for off-site use, and are chemical feedstocks

Environmental considerations for comprehensive development

Location Map of Water Disposal Facilities from Mining and Gas Production

Las Animas County, Colorado is Home to Approximately 600 Farms and Ranches

Sustainable development of resources

• What is the value of each of the resources – how do they compare?

• What are the benefits of CBM production in those mineable coal seams – pre-mine drainage?

• What options were considered in the study?– Plug and temporarily abandon wells completed in mineable coal

seams and later recomplete as gob vent boreholes

– Leave wells intact with sufficient barrier pillars and continue to mine coal as the mine plan allows

– Purchase CBM wells and mine through them

Value of CBM wells based on estimated ultimate

recovery

Mutually undesirable impacts on coal and gas production


Technical considerations for comprehensive

development

• MSHA regulations for the size of barrier pillars were determined by Oil & Gas Industry– 300’ radius pillar surrounding well

• Mine has a right to petition for an alternative program as long as the safety of miners is protected

• Successful instances in the Appalachian Basin

Undesirable impacts

• Gas production may or may not be interrupted and coal mining

may experience undesirable impacts from CBM production

– Having to work around barrier pillars

– Cement bond may not be sufficient in some cases to protect from gas

migration into mine workings

– Do the present regulations address the real issues?

• Are the regulations for barrier pillars adequate for mining?

• Present policies do not accommodate various geologic and coal/gas

production and mining issues across energy resource rich sedimentary

basins

Plan view of 3D model runs

First Run: 100 x 100 ft mine out of gas producing coal seam

Sixth Run: 500 x 500 ft mine out of gas producing coal seam

Full model at end of simulation

Results of mining encroachment on gas producing

coal seam

Single well gas production rate vs time

over 5 years

Single well cumulative gas production over 5 years

Conclusions


Conclusions

• Raton Basin in Southeast Colorado has been locale for profitable coal mining and gas

(conventional and CBM) extraction for many years. Water has been co-produced and may

become the most precious commodity, but presently does not have a market value. Long term

impacts on the agricultural community should be reassessed.

• Co-development of resource extraction poses challenges that are surmountable. Coordination

is desirable, but not required among entities that control mineral rights in most countries. This

should change.

• Lack of coordination efforts between coal and gas developers can lead to unplanned costs and

may lead to unexpected hazards. This should be incorporated into principles-based policy and

regulations.

• Benefits to planned co-development could lead to fewer production interruptions for miners and

gas producers and should be coordinated to enhance efforts to reduce greenhouse gas

emissions. Use and value of water resources should also be considered during planning.

Thank You!

Contact Information:

Raymond C. Pilcher

[email protected]

James S. Marshall

[email protected]


mailto:[email protected]

mailto:[email protected]

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